From Portfolio Management to Open Innovation - 2012 R&D Innovation and Product Development Priorities Survey Results

growth team m e m b e r s h i p™ 1 americas From Portfolio Management to Open Innovation 2012 r & d /innovation and product development priorities survey results TWEET ABOUT THE SURVEYS #2012priorities Co-SponsorThe contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved.

growth team m e m b e r s h i p™ 2012 survey results 2 CONTENTS Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 INTRO Survey Purpose and Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 What is the Growth Team Membership™ . . . . . . . . . . . . . . . . . . . . . . . . .5 R&D/Innovation and Product Development Overarching Challenges . . . . . . . . . . .6 SECTION 1 Key R&D/Innovation and Product Development Challenges . . . . . . . . . . . . . . . .7 SECTION 2 R&D/Innovation and Product Development Resource Trends . . . . . . . . . . . . . . 11 SECTION 3 Special Interest Topic: Open Innovation . . . . . . . . . . . . . . . . . . . . . . . . . 17 SECTION 4 Respondent Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved.

growth team m e m b e r s h i p™ 2012 survey results Introduction 3 R&D/Innovation and Product Development Executive Summary SECTION 1: Key R&D/Innovation and Product Development Challenges Key Internal Challenge Key Internal Challenge Root Cause Prioritizing innovation ideas and projects Ineffective process SECTION 2: R&D/Innovation and Product Development Resource Trends Budgets Resources Resource Allocation R&D typically has an annual budget of Budgets and staffing levels will increase More resources are being allocated to short- $20 million or more moderately and medium-term innovation projects SECTION 3: Open Innovation (OI) OI Team Key OI Challenge External OI Sources Majority of companies have some form of Establishing buy-in internally for open Customers are the primary source of OI ideas OI team innovationThe contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Introduction 4 Survey Purpose and Respondents 146 survey respondents Research Objective Methodology Survey Population Co-Sponsor To understand the most pressing Web-based survey platform Manager-level and above challenges shaping R&D/innovation R&D/innovation and product and product development development executives from executives’ 2012 planning companies throughout North and South AmericaThe contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Introduction 5 What is the Growth Team Membership™? GTM is a subscription program that supports executives GTM provides best practices, events, and services that enable within the functions that report to the CEO executives to address challenges within their companies CEO’s Growth Team™ GTM: Creating Client Value R&D/ GTM’s case-based best practices help executives: R&D/ Innovation Innovation Corporate Sales Strategy Leadership Speed the design and implementation of initiatives by not reinventing the wheel Marketing CEO Corporate Development Save money and reduce risk by avoiding mistakes made by other companies Investors/ Market Finance Research Accelerate problem-solving with a cross‑industry perspective Competitive Intelligence Improve their functions’ and companies’ performance and productivity GTMresearch@frost.com www.gtm.frost.com twitter.com/Frost_GTM slideshare.net/FrostandSullivanThe contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Introduction 6 What’s Keeping R&D/Innovation and Product Development Executives Up at Night in 2012? R&D/Innovation and Product Development Overarching Challenges Sample Solutions from GTM Portfolio Management R&D/innovation executives need to develop Learn how ConvaTec developed a portfolio management process a methodology that allows them to prioritize that makes efficient use of cross-functional governing teams and innovation projects based on their economic value phase reviews. and role in the portfolio. Collaborative Innovation As open innovation continues to gain momentum, Learn how IBM’s executive briefing centres bring together R&D executives need to identify methods for customers, business partners, and IBM industry experts and collaborating with customers, adjacent businesses, and researchers to explore how leading-edge technologies can solve suppliers. pressing business challenges. Open Innovation and Partnerships As R&D executives apply open innovation to their Learn how our Strategic Partnerships toolkit helps you screen product development processes they often struggle and evaluate potential partners based on their degree of strategic to evaluate and establish trust with strategic partners. alignment and willingness to collaborate. Contact us at GTMResearch@frost.com.The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results 7 INTRO SECTION 1 Key R&D/Innovation and Product Development Challenges SECTION 2 SECTION 3 SECTION 4The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 1 8 Top Five R&D/Innovation and Product Development Challenges Challenge 1 Prioritizing innovation ideas and projects (14%) Allocating portfolio spend across short-, medium-, and long- term Challenge 2 projects (11%) Challenge 3 Identifying breakthrough new product ideas (13%) Challenge 4 Maximizing portfolio value while mitigating portfolio risk (8%) Challenge 5 Integrating input from partners in Sales, Marketing, etc. (10%) Note: The respondents were asked to rank their top five challenges. The percentage values indicate how many respondents listed that particular challenge as their first through fifth challenge. SURVEY QUESTION: What are the top five functional challenges shaping your R&D/innovation and product development strategy?The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 1 9 R&D executives in B-to-B companies are struggling with open innovation, while their peers in B-to-C companies endeavor to identify and secure buy-in for new ideas Top Five R&D/Innovation and Product Development Challenges (By Business Model) B-to-B B-to-C Securing executive buy-in for promising Challenge 1 Prioritizing innovation ideas and projects (18%) innovations (11%) Allocating portfolio spend across short-, Challenge 2 Prioritizing innovation ideas and projects (19%) medium-, and long- term projects (14%) Generating an accurate and relevant technology Identifying breakthrough new product ideas Challenge 3 roadmap (9%) (14%) Streamlining research, design, and development Allocating portfolio spend across short-, Challenge 4 activities to reduce costs (10%) medium-, and long- term projects (10%) Streamlining research, design, and development Challenge 5 Managing an open innovation process (15%) activities to reduce costs (13%) Note: The respondents were asked to rank their top five challenges. The percentage values indicate how many respondents listed that particular challenge as their first through fifth challenge.The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 1 10 R&D executives’ challenges are predominantly attributed to understaffing Top Five R&D/Innovation and Root Cause of Top Five R&D/Innovation Product Development Challenges and Product Development Challenges Challenge 1 Prioritizing innovation ideas and projects Process: Ineffective process (35%) Allocating portfolio spend across short-, Challenge 2 Staff: Limited resources (46%) medium-, and long- term projects Identifying breakthrough new product Challenge 3 Staff: Limited resources (43%) ideas Maximizing portfolio value while Challenge 4 Staff: Limited resources (25%) mitigating portfolio risk Integrating input from partners in Sales, Challenge 5 Staff: Limited resources (30%) Marketing, etc. SURVEY QUESTION: Please indicate the root cause—staff, process, technology/systems, or strategic alignment—of your top five R&D/innovation and product development challenges.The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results 11 INTRO SECTION 1 SECTION 2 R&D/Innovation and Product Development Resource Trends SECTION 3 SECTION 4The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 2 12 Most respondents report R&D/innovation budgets in excess of $20 million 2012 R&D/Innovation and Product Development Budgets (By Business Model) 40% percentage of company revenue 40% allocated to r&d Companies dedicated approximately 3% of their 34% 2011 revenue to their 2012 R&D/innovation and product development budgets. F 30% 30% 24% The red percentages are for all respondents. 20% 16% 14% 15% 14% 14% 13% F 12% F F 12% F 11% 10% 9% 7% 6% 8% 7% F 6% F 4% 4% 0% Below $500,000 $500,000 to $1 Million to $3 Million to $5 Million to $10 Million to $20 Million $999,999 $2.99 Million $4.99 Million $9.99 Million $19.99 Million or more All Companies B-to-B Companies B-to-C Companies SURVEY QUESTION: hich of the above ranges (in $USD) best describes your 2012 total R&D/innovation and product development budget (all expenditures W on R&D/innovation and product development activities and general & administrative—including staff)?The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 2 13 The majority of R&D executives are spending more on short-term innovation projects Change in Portfolio Allocation (By Business Model) Short-Term, Incremental Medium-Term Innovation Long-Term Innovation Disruptive Technologies Innovation (adoption in 2 to 4 years) (adoption in 4 to 10+ years) (adoption within 2 years) INCREASE 58% 38% 18% 30% All STAY THECompanies SAME 30% 46% 46% 44% DECREASE 12% 16% 36% 26% INCREASE 60% 35% 12% 37% B-to-B STAY THECompanies SAME 25% 48% 52% 44% DECREASE 15% 17% 36% 19% INCREASE 54% 42% 26% 25% B-to-C STAY THECompanies SAME 36% 42% 34% 47% DECREASE 10% 16% 34% 28% SURVEY QUESTION: In comparison to 2011, your 2012 R&D/innovation and product development budget for each of the above project categories will…The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 2 14 Respondents anticipate additional staff in 2012 R&D/Innovation and Product Development Staffing Changes (By Business Model) All Companies B-to-B Companies Decrease Substantially 3% Increase Substantially Decrease Substantially Increase Substantially 5% Decrease Moderately 4% 4% Decrease Moderately 19% 12% 41% Increase Moderately 40% Increase Moderately 33% 39% Stay the Same Stay the Same B-to-C Companies Increase Substantially 6% Decrease Moderately 27% 44% Increase Moderately 23% Stay the Same SURVEY QUESTION: In comparison to 2011, your 2012 R&D/innovation and product development staffing will…The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 2 15 R&D executives expect their budgets to increase in 2012 R&D/Innovation and Product Development Budget Changes (By Business Model) All Companies B-to-B Companies Decrease Substantially 3% Increase Substantially Decrease Substantially 2% Increase Substantially Decrease Moderately 4% Decrease Moderately 6% 15% 13% 45% Increase Moderately 27% 31% Stay the Same 54% Increase Moderately Stay the Same B-to-C Companies Increase Substantially Decrease Moderately 8% 18% 41% Increase Moderately 33% Stay the Same SURVEY QUESTION: In comparison to 2011, your 2012 R&D/innovation and product development budget will…The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 2 16 Regardless of business model, respondents rank their functions’ effectiveness as “Above Average” R&D/Innovation and Product Development Effectiveness (By Business Model) All Companies B-to-B Companies Poor Exceptional 2% Exceptional Below Average Below Average 4% 4% 12% 12% 49% 48% 37% Average 33% Average Above Average Above Average B-to-C Companies Poor Exceptional 2% 2% Below Average 12% 53% 31% Above Average Average SURVEY QUESTION: How would you rate the performance or effectiveness of your function compared to others within your industry?The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results 17 INTRO SECTION 1 SECTION 2 SECTION 3 Special Interest Topic: Open Innovation SECTION 4The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 3 18 Most companies assign open innovation to a sub-team within R&D OI Teams Within R&D (By Business Model) All Companies B-to-B Companies B-to-C Companies 59% 58% 64% Yes Yes Yes OI Team Structure OI Team Structure OI Team Structure Sub-group within R&D/product Sub-group within R&D/product Part-time technology scout(s) within R&D/ development (37%) development (42%) product development (38%) SURVEY QUESTION: o you have staff dedicated to open innovation? If so which of the above describes your open innovation team structure? DThe contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 3 19 The majority of companies assign no more than four employees to open innovation tasks Number of OI Staff (By Business Model) 6 This graph represents the median value for the number of OI staff. 4 4 Number of 3 3 OI Staff 0 All Companies B-to-B Companies B-to-C Companies SURVEY QUESTION: Approximately how many people in your company are assigned to open innovation?The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 3 20 Respondents’ OI challenges run the gamut of garnering initial buy-in to collaborating with partners Top Five Open Innovation Challenges (By Business Model) All Companies B-to-B Companies B-to-C Companies Establishing buy-in internally for open Creating mutually agreed-upon key Creating an effective open innovation innovation (25%) performance indicators (22%) collaboration framework (19%) Garnering the internal resources needed Assessing the viability of a potential Assessing the viability of a potential to test innovation concepts’ feasibility partner (11%) partner (14%) (17%) Garnering the internal resources needed Creating a shared understanding of the Overcoming the fear of lost IP and to test innovation concepts’ feasibility challenge(s) to be addressed through open competitive advantage (11%) (14%) innovation (14%) Creating mutually agreed-upon key performance indicators (17%) Creating a shared understanding of the Creating an effective open innovation challenge(s) to be addressed through open Developing a process to assess innovation collaboration framework (17%) innovation (23%) concepts’ feasibility (17%) Measuring the impact of open innovation Measuring the impact of open innovation Developing a process to assess innovation on product development efforts as a on product development efforts as a concepts’ feasibility (16%) whole (11%) whole (20%) SURVEY QUESTION: Rank the above open innovation challenges in order of importance.The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 3 21 B-to-C respondents are more likely to use OI throughout the product development cycle than their B-to-B peers Use OI in the Product Development Cycle (By Business Model) Concept testing Idea generation Idea screening Product launch and development All 38% 25% 24% 1% Companies B-to-B 33% 21% 18% 1% Companies B-to-C 46% 33% 35% 2% Companies SURVEY QUESTION: During which stage(s) of the product development process does your company use open innovation (check all that apply)?The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 3 22 Regardless of business model, customers are R&D’s primary source of OI ideas Top Three OI Sources (By Business Model) All Companies B-to-B Companies B-to-C Companies Customers (39%) Customers (44%) Customers (33%) Adjacent businesses (30%) Adjacent businesses (33%) Adjacent businesses (28%) Academia (28%) Academia (27%) Academia (29%) SURVEY QUESTION: Please rank your top three sources of open innovation ideas.The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results 23 INTRO SECTION 1 SECTION 2 SECTION 3 SECTION 4 Respondent DemographicsThe contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 4 24 Respondent Demographics Enterprise Type Business Model Not for Profit Government/Public Sector 3% 3% The majority of The majority of the Venture Capital respondents work in B-to-C respondents come from Hybrid 1% publicly held companies. 6% Company B-to-B companies. (Indirect) 31% 50% Public 55% 37% B-to-B Private Company 14% B-to-C Company (Direct) N = 149 N = 142 Company Revenue 50% 31% 30% 25% 17% 16% 6% 0% N = 144 Below $100 Million to $500 Million to $1 Billion to More than $100 Million $499.99 Million $999.99 Million $11 Billion $11 Billion SURVEY QUESTION: Please indicate the type of enterprise, business model, and revenue that best represents your company.The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

growth team m e m b e r s h i p™ 2012 survey results Section 4 25 Respondent Demographics: Top Six Participating Industries Information and Communication Technologies 16% Electronics and Security 16% Consumer Goods 17% Automotive and Transportation 20% Chemicals, Materials, and Food 22% Healthcare and Life Sciences 36% 0% 20% 40% N = 146 SURVEY QUESTION: Please indicate which region you are located in and which industry categories best describe your company (check all that apply).The contents of these pages are copyright © 2012 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

http://www.frost.com	205
http://www.awards.frost.com	3
http://www.gilcommunity.com	3
http://informationresearch07.e.corpintra.net	1
http://www.frost.com.prox.lib.ncsu.edu	1
http://www.frost.com.libproxy.mit.edu	1
http://gilcommunity.com	1

From Portfolio Management to Open Innovation - 2012 R&D Innovation and Product Development Priorities Survey Results

by Frost & Sullivan

Accessibility

Categories

Upload Details

Usage Rights

7 Embeds 215

Statistics

From Portfolio Management to Open Innovation - 2012 R&D Innovation and Product Development Priorities Survey Results Presentation Transcript